Exporters Embrace Automation to Stimulate Productivity and Profits

Coronavirus pandemic has made many things evident to Canadian exporters, including the fact that investing in automation and technology is the future of exporting.

President and chief executive officer of Canadian Manufacturers and Exporters (CME), Dennis Darby says, firms that invested in automation are now availing benefits wherein those that didn't are trying to catch up. "The first group is now saying that we need more new technology to meet demand while the other is saying that it's a time to re-think operations."

He adds, "With physical distancing and worker absenteeism two key challenges amid COVID-19 pandemic, many Canadian exporters find themselves in the latter category."

There's no surprise given the historical lack of investment in automation.

"Our productivity relative to Organisation for Economic Co-operating and Development (OECD) countries has been falling for years," Darby states. "A lot of that is because companies have been slow to adopt new technology."

As per the last year's report by CME, it warned about the lack of capital investment by Canadian manufacturers. It discovered that manufacturers' spending on technology and equipment fell by 21% between 2005 and 2017 and consequently productivity suffered.

Canada stands fourth-last in productivity among OECD nations. In comparison, U.S manufacturers' productivity has expanded three times faster over the past 15 years.

Darby notes, "Many Canadian companies had been substituting labour for capital investment. That's not enough, and investing in technology is critical for development and being able to employ even more workers."

Today, keeping existing workers on the factory floor seems challenging. "What we hear from members is COVID-19 related problems and social distancing. These are now driving interest in automation," Darby says.

Shelly Fellows, chair of Automated Canada, says that investing in technology takes time and those now behind this transformation are not likely to benefit while the pandemic surges.

Represented the nation's providers of automation solutions, Fellows adds, "It's not as simple as run this software and the laptop's operating system will do the rest."

Canadian automation companies serve only two markets. One is Canadian exporters, seeking to innovate due to the pandemic and the other is manufacturers in other countries. Co-bots or collaborative robots are in-demand technologies in both markets. These are designed to work safely side-by-side with a human.

Co-bots are capable of doing heavy lifting or highly repetitive tasks wherein workers perform more high-touch fine-motor-skill tasks. This technology is designed to meet the requirement for physical distancing on factory floors. Miralis, Quebec-based kitchen cabinet-maker which exports around 20% of its product to the U.S. East Coast is already seeing the benefits.

Daniel Drapeau, president of the Rimouski, Quebec-based company, says, "We decided to invest a few years ago close to 8% of our topline revenue in capital expenditures." He adds, "That's the amount most European companies have been doing while Canadian companies have been doing about 3% or 4%."

Adding robots took several years for Miralis, but it's been worth the cost, time, and effort. He points out to two machines that replaced 12 workers' sanding duties at its factory.

Drapeau notes, rather than automation eliminating jobs it allows Miralis to expand faster because machines increase production capacity. This strategy has been a success, and it has even accelerated the additional new robot that does cabinet pre-assembly.

Mentioning about the machine that can drill around two million holes a year, he says, "We were going to hold off until after the pandemic, but team members at the plant were asking us to get it going."

Drapeau agrees integrating new automation takes plenty of planning, and says, "It can't be done overnight. It's not something you can decide to do during the pandemic and see the benefits immediately."

Canadian firms that are involved in making the shift easier are seeing a rise in business. i-50, for example, uses artificial intelligence and data to help companies test their manual production processes and improve them. Khizer Hayat, i-50's chief innovation officer, says, "Our technology is developed in Canada and then exported across North America and Asia."

As Canada offered numerous incentives and has a deep talent pool, this company came to Ontario and built AI-powered technology to create 'digital twins for manual manufacturing processes'. This technology is in demand because it allows their industrial engineers to analyse manufacturing operations remotely.

Hayat says, "Before our platform, engineers were going onto the production floor with a stopwatch measuring the time it takes to do these activities." He adds, "Our technology enables manufacturers to monitor processes remotely and improve it from home."

As the pandemic has driven home automation's benefits for Canadian exporters, everybody around the world now is trying to adapt to this.